Freelance Client Retainers Part 1: Pros & Cons

Hi everyone! Hope you're all gearing up for the holiday season because we sure are. Today was technically our last day in the office. Elle is off for the week and I am coming in tomorrow for some last minute work things before we take a much needed two week break. I'm super pumped about it and I hope you are all taking some time off as well. Rest is just as important as productivity and definitely needs to be prioritized. While our last post was all about how to prepare for OOO, this week's post is all about freelance retainers. Yup, those things! They can be both awesome and not so awesome if we're being truly being honest. If you're unfamiliar with what a retainer is, it's essentially an agreement between you and your client where you agree to get paid a set amount in advance for a service (or services) on a recurring schedule. All retainer agreements can vary and look different from one to the next.

I remember when we were first starting out, the idea of having a retainer client seemed like the perfect thing for us and why shouldn't it be... right? Stable income and work sounds pretty great to me. Well, let's just say we gave it a shot and it didn't work for us. And you know what? That's ok. It may work great for some and not at all for others. It's just something you'll have to discover for yourself by trying it out. If you've been thinking about whether retainer clients are for you, keep on reading below to find out all the pros and the cons. Let's start with the pros, shall we?

The Pros:

Stable Income

This one's the most obvious pro and one that makes the most sense in our head. Knowing how wild the freelance journey is with all its ups and downs, the idea of stable income is a total dream. We all want financial stability in our business and retainer clients and/or agreements provide just that. You know exactly what you're getting paid and when. There are no surprises and you can count on that money coming in which is a huge help when you're planning out your finances. Having that guaranteed pay might also mean that you won't spend unnecessary time chasing payments. 

Expected Work and Predictability

Along with stable income, a retainer client will provide steady work and that's always a plus.  You don't have to worry or do the work of finding new clients as often because you'll already have that expected project(s) every month. The work that comes from a retainer client is also predictable which makes it easier to plan when you'll complete the work or services you have offered.

Workflow Improvement

One of the biggest pros of a client retainer is that the longer you work with the client, the more efficient you will become. When you work with the same client over and over for an extended period of time, you get to know their businesses, processes, and audiences pretty well which ends up improving the work you create for them. The more practice you have going through your workflow with this client, the more efficient you'll become and who doesn't want to get quicker at completing projects? Time is money, am I right?

Relationship Building and Client Retention

Another great plus to having a retainer client is the simple fact that you are gaining trust with each other. The longer you work with this client, the more dependable and valuable you will be seen. Clients love retainers because it means they won't have to continue looking for new contractors and there's a sense of security on both ends of the relationship. Having long-term clients can be pretty special and it might also mean that you won't have to go through that "proposal" process as often. If the worst part about freelancing for you is having to talk to new faces all time to gain new clients, retainers are a great way for you to stick with the clients that you already trust and are comfortable with.

The Cons:

Scope Creep and Client Expectations

We all know what can happen when expectations aren't clearly laid out and clients feel like they can adjust the scope without having any repercussions. Scope creep is one of the biggest cons about retainer agreements, especially when you're getting paid in advance prior to the completion of the job. It can be extremely easy for the lines to get blurred if your contract/agreement isn't clearly outlined. You might get taken advantage of and assumptions about what you're expected to do can occur which can quickly lead to a lot of miscommunication and resentment down the line.

Clients May Expect Lower Pay

Another con to retainer agreements is that sometimes clients will expect that you will lower your rate or give them a discount simply because they're guaranteeing you pay for the amount of time you have agreed in your contract. The same way that certain industries/businesses will charge less when you buy in bulk, the same kind of mentality can apply here. Clients think that because they're essentially pre-paying for a bulk of your services, then they should be privy to a discount. While Elle and I find a lot of problems with this mentality (lol), that doesn't mean clients won't think this way.

Raising Rates May Be Difficult

Once you've set your rate for a retainer client, it can be very difficult to raise your prices with them. There's not a lot of room for negotiation when it's been baked into a contract and clients will find it pretty difficult to justify any changes after they've been accustomed to the rate at which you started. If you're lucky enough to convince your clients to raise your rate, there's a huge chance that your adjusted rate could depend or be determined by your client's feelings over how happy they've been with your skills and the work you're producing for them. That alone can be incredibly subjective and doesn't account for the skills you've developed/improved over time working for them or the fact that your business is growing and you have more expenses.

Dependency and Comfortability

This particular con is a big one. When you're working with a retainer client and you've enjoyed having a stable income and expected work coming in, it can be easy to forget that a client could potentially leave you at any point. Retainer clients provide stability but they can also make you dependent on them. There's also a chance that you've realized that you're being taken advantage of but you're afraid to end the retainer because they might be a large percentage of your income. It can be quite scary and so a lot of times retainer clients can breed a lot of dependency. 

A different kind of dependency that can occur within a retainer agreement is that your client may expect you to be at their beck and call. Your clients might start to depend on you for all of their needs which sort of goes right along with scope creep.

After you've worked with a client for a period of time, there's also chance that both parties may get "comfortable" with each other that certain boundaries might start getting crossed and it can be tough to step back into those "professional" roles.

Stagnation

Lastly but definitely not least, retainer agreements may lead to stagnation. If you thrive on stability and familiarity then this may not be the case for you but many creatives out there want to be stimulated and thrive from working on different kinds of projects. Part of why we become freelancers is so that we have the freedom to choose what to take on. Therefore, if you're working for the same client over and over, it could potentially lead to boredom and feeling like you're not improving or getting enough variety in your work. 

So that's it guys, those are your pros and cons for freelance client retainers. That was quite a lot of information which is why I'm going to split this post into two parts so be on the lookout for part 2 where we'll get into whether client retainers are a good fit for you and what to look out for if you decide to move forward with this type of client agreement to make sure it's a successful one. :)

Is it the holidays yet?
Arabela